A new report from the San Francisco Fed quashes objections to buying goods made in China because more money stays in the U.S. than goes abroad.
The study shows that for every dollar spent on a China-made item, 55 cents go to U.S. businesses for services such as marketing and sales.
Moreover, the widespread belief that the most spending is on foreign-made items is mistaken one. "Consumer spending means a lot more than going shopping," Bart Hobijn, a senior research adviser at the San Francisco Fed who co-wrote the report, tells USA Today. "If you get a haircut, pay your electricity bill, go to the movies, that's all part of consumption."
The Fe’s researchers found that the vast majority of goods and services sold in the U.S. are made in the country, Shoes and clothing are an exception, with nearly 36 percent of U.S. dollars spent on Chinese-made items, compared with 25 percent on U.S.-made products.
The U.S. also sells aggressively to China, which is now its third biggest export market.
"Frankly, you don't hear enough about the export story," says Erin Ennis, vice president of the U.S.-China Business Council, which represents American firms doing business with China. "The more we export to China, the more jobs we sustain here."
From 2000 through 2010, U.S. exports of electronics, agricultural and other products to China rose 468 percent to $91.9 billion, while its exports to the rest of the world increased 55 percent, according to the U.S.-China Business Council.
The China Daily reports that China's trade surplus fell to 1.44 percent of the country's gross domestic product (GDP) in the year's first half and the proportion is expected to drop further this year.
© 2013 Moneynews. All rights reserved.